Revenue Maximization in Stackelberg Pricing Games: Beyond the Combinatorial Setting

In a Stackelberg Pricing Game a distinguished player, the leader, chooses prices for a set of items, and the other players, the followers, each seeks to buy a minimum cost feasible subset of the items. The goal of the leader is to maximize her revenue, which is determined by the sold items and their prices. Most previously studied cases of such games can be captured by a combinatorial model where we have a base set of items, some with fixed prices, some priceable, and constraints on the subsets that are feasible for each follower. In this combinatorial setting, Briest et al. and Balcan et al. independently showed that the maximum revenue can be approximated to a factor of H_k ~ log(k), where k is the number of priceable items. Our results are twofold. First, we strongly generalize the model by letting the follower minimize any continuous function plus a linear term over any compact subset of R_(n>=0); the coefficients (or prices) in the linear term are chosen by the leader and determine her revenue. In particular, this includes the fundamental case of linear programs. We give a tight lower bound on the revenue of the leader, generalizing the results of Briest et al. and Balcan et al. Besides, we prove that it is strongly NP-hard to decide whether the optimum revenue exceeds the lower bound by an arbitrarily small factor. Second, we study the parameterized complexity of computing the optimal revenue with respect to the number k of priceable items. In the combinatorial setting, given an efficient algorithm for optimal follower solutions, the maximum revenue can be found by enumerating the 2^k subsets of priceable items and computing optimal prices via a result of Briest et al., giving time O(2^k|I|^c ) where |I| is the input size. Our main result here is a W[1]-hardness proof for the case where the followers minimize a linear program, ruling out running time f(k)|I|^c unless FPT = W[1] and ruling out time |I|^o(k) under the Exponential-Time Hypothesis

Designing Cost-Sharing Methods for Bayesian Games

We study the design of cost-sharing protocols for two fundamental resource allocation problems, the Set Cover and the Steiner Tree Problem, under environments of incomplete information (Bayesian model). Our objective is to design protocols where the worst-case Bayesian Nash equilibria have low cost, i.e. the Bayesian Price of Anarchy (PoA) is minimized. Although budget balance is a very natural requirement, it puts considerable restrictions on the design space, resulting in high PoA. We propose an alternative, relaxed requirement called budget balance in the equilibrium (BBiE). We show an interesting connection between algorithms for Oblivious Stochastic optimization problems and cost-sharing design with low PoA. We exploit this connection for both problems and we enforce approximate solutions of the stochastic problem, as Bayesian Nash equilibria, with the same guarantees on the PoA. More interestingly, we show how to obtain the same bounds on the PoA, by using anonymous posted prices which are desirable because they are easy to implement and, as we show, induce dominant strategies for the players

Minimum Stable Cut and Treewidth

A stable or locally-optimal cut of a graph is a cut whose weight cannot be increased by changing the side of a single vertex. Equivalently, a cut is stable if all vertices have the (weighted) majority of their neighbors on the other side. Finding a stable cut is a prototypical PLS-complete problem that has been studied in the context of local search and of algorithmic game theory. In this paper we study Min Stable Cut, the problem of finding a stable cut of minimum weight, which is closely related to the Price of Anarchy of the Max Cut game. Since this problem is NP-hard, we study its complexity on graphs of low treewidth, low degree, or both. We begin by showing that the problem remains weakly NP-hard on severely restricted trees, so bounding treewidth alone cannot make it tractable. We match this hardness with a pseudo-polynomial DP algorithm solving the problem in time (?? W)^{O(tw)}n^{O(1)}, where tw is the treewidth, ? the maximum degree, and W the maximum weight. On the other hand, bounding ? is also not enough, as the problem is NP-hard for unweighted graphs of bounded degree. We therefore parameterize Min Stable Cut by both tw and ? and obtain an FPT algorithm running in time 2^{O(?tw)}(n+log W)^{O(1)}. Our main result for the weighted problem is to provide a reduction showing that both aforementioned algorithms are essentially optimal, even if we replace treewidth by pathwidth: if there exists an algorithm running in (nW)^{o(pw)} or 2^{o(?pw)}(n+log W)^{O(1)}, then the ETH is false. Complementing this, we show that we can, however, obtain an FPT approximation scheme parameterized by treewidth, if we consider almost-stable solutions, that is, solutions where no single vertex can unilaterally increase the weight of its incident cut edges by more than a factor of (1+?). Motivated by these mostly negative results, we consider Unweighted Min Stable Cut. Here our results already imply a much faster exact algorithm running in time ?^{O(tw)}n^{O(1)}. We show that this is also probably essentially optimal: an algorithm running in n^{o(pw)} would contradict the ETH

The Geometry of Manipulation — A Quantitative Proof of the Gibbard Satterthwaite Theorem

We prove a quantitative version of the Gibbard-Satterthwaite theorem. We show that a uniformly chosen voter profile for a neutral social choice function f of q ≥ 4 alternatives and n voters will be manipulable with probability at least 10−4∈2 n −3 q −30, where ∈ is the minimal statistical distance between f and the family of dictator functions. Our results extend those of [11], which were obtained for the case of 3 alternatives, and imply that the approach of masking manipulations behind computational hardness (as considered in [4,6,9,15,7]) cannot hide manipulations completely. Our proof is geometric. More specifically it extends the method of canonical paths to show that the measure of the profiles that lie on the interface of 3 or more outcomes is large. To the best of our knowledge our result is the first isoperimetric result to establish interface of more than two bodies

Budget-Feasible Mechanism Design for Non-Monotone Submodular Objectives: Offline and Online

The framework of budget-feasible mechanism design studies procurement auctions where the auctioneer (buyer) aims to maximize his valuation function subject to a hard budget constraint. We study the problem of designing truthful mechanisms that have good approximation guarantees and never pay the participating agents (sellers) more than the budget. We focus on the case of general (non-monotone) submodular valuation functions and derive the first truthful, budget-feasible and $O(1)$-approximate mechanisms that run in polynomial time in the value query model, for both offline and online auctions. Prior to our work, the only $O(1)$-approximation mechanism known for non-monotone submodular objectives required an exponential number of value queries. At the heart of our approach lies a novel greedy algorithm for non-monotone submodular maximization under a knapsack constraint. Our algorithm builds two candidate solutions simultaneously (to achieve a good approximation), yet ensures that agents cannot jump from one solution to the other (to implicitly enforce truthfulness). Ours is the first mechanism for the problem where---crucially---the agents are not ordered with respect to their marginal value per cost. This allows us to appropriately adapt these ideas to the online setting as well. To further illustrate the applicability of our approach, we also consider the case where additional feasibility constraints are present. We obtain $O(p)$-approximation mechanisms for both monotone and non-monotone submodular objectives, when the feasible solutions are independent sets of a $p$-system. With the exception of additive valuation functions, no mechanisms were known for this setting prior to our work. Finally, we provide lower bounds suggesting that, when one cares about non-trivial approximation guarantees in polynomial time, our results are asymptotically best possible.Comment: Accepted to EC 201

On Simultaneous Two-player Combinatorial Auctions

We consider the following communication problem: Alice and Bob each have some valuation functions $v_1(\cdot)$ and $v_2(\cdot)$ over subsets of $m$ items, and their goal is to partition the items into $S, \bar{S}$ in a way that maximizes the welfare, $v_1(S) + v_2(\bar{S})$. We study both the allocation problem, which asks for a welfare-maximizing partition and the decision problem, which asks whether or not there exists a partition guaranteeing certain welfare, for binary XOS valuations. For interactive protocols with $poly(m)$ communication, a tight 3/4-approximation is known for both [Fei06,DS06]. For interactive protocols, the allocation problem is provably harder than the decision problem: any solution to the allocation problem implies a solution to the decision problem with one additional round and $\log m$ additional bits of communication via a trivial reduction. Surprisingly, the allocation problem is provably easier for simultaneous protocols. Specifically, we show: 1) There exists a simultaneous, randomized protocol with polynomial communication that selects a partition whose expected welfare is at least $3/4$ of the optimum. This matches the guarantee of the best interactive, randomized protocol with polynomial communication. 2) For all $\varepsilon > 0$, any simultaneous, randomized protocol that decides whether the welfare of the optimal partition is $\geq 1$ or $\leq 3/4 - 1/108+\varepsilon$ correctly with probability $> 1/2 + 1/ poly(m)$ requires exponential communication. This provides a separation between the attainable approximation guarantees via interactive ($3/4$) versus simultaneous ($\leq 3/4-1/108$) protocols with polynomial communication. In other words, this trivial reduction from decision to allocation problems provably requires the extra round of communication